German left hopes to slow Merkel's momentum in key state vote

BRAUNSCHWEIG, Germany (Reuters) - A decade and a half ago, Gerhard Schroeder's resounding victory in a state vote in Lower Saxony gave his Social Democrats (SPD) the momentum they needed to seize power in Germany after 16 long years of conservative rule under Helmut Kohl.

The SPD is hoping for a similar game-changing win on January 20 when voters in the large western region go to the polls again, just eight months before Germany holds a federal election.

But this time, even if they do manage to defeat the state's conservative premier David McAllister, a rising star in Chancellor Angela Merkel's Christian Democrats (CDU), it will be tough to translate that success into victory in September, as they did in 1998.

Instead of an ageing Kohl to contend with, the SPD is up against his former protege Merkel, whose defense of German interests during the euro zone's debt crisis has made her the most popular politician in the country.

And in place of the charismatic Schroeder, who was anointed Kohl's challenger after his big win in Lower Saxony, the party is now pinning its hopes on Peer Steinbrueck, an acerbic former finance minister whose campaign to unseat Merkel has had a disastrous gaffe-filled start.

"It is a must-win for the SPD if they want to have any hope of beating Merkel in the autumn," said Gero Neugebauer, a political scientist at the Free University in Berlin. "It will be likened to Schroeder's victory in 1998 if they come out on top. But today's landscape is very different."

Bigger than the Netherlands, with which it shares a border, Lower Saxony is Germany's second-largest state by area, stretching from the North Sea to the edge of what used to be communist East Germany.

It is home to carmaker Volkswagen and hundreds of "Mittelstand", small-to-medium sized companies that form the backbone of Europe's largest economy.

The state has been a stepping stone to national power. Schroeder's successor as state premier Sigmar Gabriel is now leader of the SPD. The conservative who replaced him, Christian Wulff, rose to become German president before a financial favors scandal brought him down last year.

"I'M A MAC"

McAllister, the 41-year-old son of a Scottish soldier who plays on his heritage in a tongue-in-cheek way -- his campaign video features bagpipe music -- has run the state since Wulff left in 2010 and emerged as its most popular politician.

A recent poll showed 64 percent of voters view him favorably, compared to just 33 percent for his regional SPD rival, Stephan Weil, mayor in the state capital Hanover.

Yet he may still lose power.

If his current ruling partner, the Free Democrats (FDP), fails to make it into the state assembly, McAllister could be booted out of office by a coalition of the SPD and Greens even though the CDU seems sure to emerge as the strongest party.

A poor showing by the FDP, who are also Merkel's coalition partners in the national government, would likely lead to the ouster of the party's embattled national leader Philipp Roesler.

At a rally in the city of Braunschweig on Saturday, where 5,000 CDU supporters waved "I'm a Mac" signs, concern about FDP weakness costing the CDU victory in Lower Saxony was evident in speeches by McAllister and Merkel, who is making eight campaign trips to the state.

"We Christian Democrats are clearly the strongest party, well ahead of the SPD," McAllister said. "And the FDP are on the rise. They stand at four percent in the polls. They can get to five percent or more, it is possible."

Ousting the popular Merkel ally months before the federal vote despite coming in a distant second would have powerful symbolism for the SPD. Their only hope of defeating Merkel herself may hinge on a similar outcome.

At the very least, SPD officials believe victory in the state will lead Germans to question the seeming inevitability of a Merkel third term.

After a string of CDU losses in other states over the past year, it would also give the SPD and Greens a majority in the Bundesrat upper house of parliament, meaning they could block Merkel's policy initiatives and launch legislation of their own.

Still, leveraging a regional win into a "Red-Green" majority in September seems unlikely. That's because the SPD is polling 6-7 points weaker nationally than it is in Lower Saxony.

"A lot would have to happen for the SPD and Greens to win a majority in the federal vote. It's very hard to foresee this scenario," said Manfred Guellner, head of pollsters Forsa.

"Back in 1998 people wanted change. Kohl had ruled for 16 years and the CDU was seen as incompetent. That's just not the case anymore."